Wondering how to become a franchise owner? Our introduction to franchising details everything you should know about the costs and requirements of buying a franchise business.
Is Franchise Ownership Right For Me?
Before beginning research into how to become a franchise owner, first, you’ll need to determine if ownership is a good fit for you. The benefit of franchises is being provided a business model, but you must be a rule follower and prefer structure. They’ve already gone through trials and tribulations to perfect their business model, so trust it.
Be a team player. You’re not going into business alone. The pro to franchising is the network of other franchisees and the franchisor themselves you have to lean on for support. Franchising is about being a part of something bigger than yourself.
Active listener. You’ll receive endless advice, feedback, and sometimes constructive criticism from your peers, franchisor, and customers. It’s to your and the business’s benefit to take those comments in and act upon them.
No quitting. Once you sign on to a franchise, the agreements usually last 10 to 15 years. The startup can include long hours, lots of paperwork, and training. Remember, through it all, the franchise has a proven system that can help you find success.
Be passionate and hardworking. Just because you’re buying into a franchise doesn’t mean you don’t have to work to ensure it flourishes. A location’s success depends on the hard work and passion a franchisee puts into it, especially with home-based and service franchises. These types rely on the initiative of the franchisee. They’ll need to integrate themselves into the community and in front of customers. The franchisor will provide suggestions on how to do it, but you’ll have to perform them.
Confidence. You’ll need confidence in yourself and the business to promote it. Also, confidence helps build trust with your employees. On the other hand, doubting the strength and success of the franchise itself could lead to adverse outcomes.
Analytical and driven by growth. You’ll need to understand business analytics and how to use them to improve business performance financials. The brand will provide key performance indicators (KPIs) to help manage growth.
First Steps to Owning a Franchise
Follow these steps on how to become a franchise owner.
- Establish a budget.
Determine how much money you can pay for a franchise. Find out your net worth and cash availability because franchises have minimum requirements for both. Then decide if you need financing and how much you can get.
- Research industries and franchises.
Now that you have a budget to narrow your franchise choices, research different industries. See what’s thriving in the area and where there might be gaps on which you could capitalize. Explore specific franchises to learn about their investment costs and the training and support they provide.
- Inquire and apply with a franchise.
Once you’ve found a franchise system, you think you’ll like, fill out their inquiry form. From there, you’ll go through their application process, which varies by the franchisor. It typically includes a credit check, an interview, and a visit to the home office for a Discovery Day. During this step, you’ll review the franchise disclosure document (FDD), which includes financial statements and requirements. Ask the franchisor all the questions you want during this phase, including talking with current franchisees. You want complete assurance that this is the right brand to invest in.
- Acquire financing.
Determine where and how much funds you’ll need to invest in the franchise and acquire it.
- Sign the franchise agreement.
Sign on all the dotted lines and pay the upfront fee. You’re officially a franchisee.
Understanding the Costs of Franchise Ownership
Good news — there’s pretty much a franchise that can fit into most budgets. There are costly ones like a food franchise or hotel that can total up to multi-million-dollar initial investments. Or there are home-based service franchises like Mosquito Authority. The total initial investment is $54,000 to $127,700.
What’s included in an initial investment depends on the franchise in the industry. They typically include the franchise fee, real estate or property expenses, supplies and equipment, furniture and fixtures, insurance, training, and advertising and marketing expenses. With a home-based franchise, you can skip out on the real estate or property costs and furnishing expenses.
Ongoing expenses include royalty fees, advertising and marketing fees, and technology fees. The FDD lays out how much these expenses are.
Finding Franchise Success With Mosquito Authority
If you’re looking to own a business but want the support of a franchise system, Mosquito Authority is a great option. Only one employee (you!) is needed to run the business. It’s easily scalable and can also allow you to take a less hands-on approach. No office or storefront is required, allowing you to run it out of your home and allowing for more freedom with your time and personal life.
Contact us today to learn more about how to become a franchise owner with us.